A comprehensive review of "essential" goods used by the 'Five Eyes' members has found that New Zealand is especially vulnerable to China as as a supplier.
In fact, it says our supply of asprin is 100% dependent on China.
But the review is far more comprehensive that just for pharmacological goods.
And we are not alone. The report judges that Australia is the most vulnerable of any for critical medical technology than any other member of this intelligence sharing group.
The report, Breaking the China Chain, published by the right-wing London think tank Henry Jackson Society, studied import data for each of New Zealand, Australia, United States, Canada and the UK.
The authors are concerned we are increasingly vulnerable to policy extortion by China, undermining our independent democratic choices.
They say that for three decades, Western nations have pursued a policy of strategic engagement with China. We hoped that by trading and engaging ever more closely with China, it would open up and move towards democracy over time. In fact, if anything, China has become steadily more authoritarian.
They want us to disengage.
Here is the note (4.5.2) that summarises New Zealand's exposure.
Although New Zealand is the second-most dependent of the five powers on China for imports, its unique profile of dependency means it is of arguably greater concern. There are 34 categories of goods, five sectors, and one industry on which New Zealand alone within the five powers is strategically dependent on Chinese imports.
Of the five powers, New Zealand is alone within the Five Eyes in that it is strategically dependent on China for printed circuits (67%), the crucial building block of much modern technology. It is also dependent on China for its supply of peroxosulphates (64%), the chemical used to etch copper into circuit boards and which China has been accused of dumping. 84 It is also strategically dependent on China for a series of goods with critical industry applications including benzene (97%), molybdenum (76%), categories of refractory bricks (69%), lathes (65%), solid caustic soda (57%), portal and pedestal jib cranes (55%), as well as six categories of simply processed steel and aluminium and one sector of such goods. Uniquely, New Zealand also appears to have a dependency on China for its transport system, including railway rolling stock at an industry level (65%), rubber inner tubes (56%), and transport vessels (71%).
New Zealand stands alone within the five powers in being dependent on China for its supply of streptomycin (95%), an essential medicine classified as “critically important to human medicine” by the WHO. 85 New Zealand is also overwhelmingly dependent on China for other forms of antibiotics including penicillins (96%) and tetracyclines (95%). Perhaps of most concern is New Zealand’s total dependency on China for acetylsalicylic acid, more commonly known as aspirin. In 2019, 100% of its imported supply originated from China.
New Zealand is similarly dependent on China for its imports of electronics and communication equipment. At a sectoral level, 63% of New Zealand’s telecommunication imports originate in China. More alarmingly, at a category level, New Zealand is the only member of the Five Eyes to be dependent on China for cellular base stations (77%). New Zealand is also dependent on China for imports of mobile phones (67%) and laptops (93%).
And here is what they says about food and agriculture (4.6.4).
In addition to being one of the world’s largest producers of critical generic drugs, China produces the bulk of the world’s health-related products, including food and vitamin supplements.
This production has been driven by both domestic and international factors. Domestically, although traditional herbal remedies and supplements have been taken for centuries, demand for Western-style vitamins and supplements has grown in recent years, with a number of domestic and multinational vitamin and supplement makers vying for a share of the market. Internationally, aging populations, together with increased demand for preventative healthcare and the rise of the self-directed consumer, led to an expansion in the vitamins market in the West from the 1970s onwards.
Today, China produces the majority of vitamins B1, B6, B12, and D. It also controls 62.33% of the global market of vitamin C, and three of the five powers are dependent on China for their supply: Australia (83.49%), Canada (57.68%), and the US (74.49%). Vitamin C, or ascorbic acid, not only has health benefits, but it also serves as a key food preservative.
In the late 1970s and early 1980s, several big Chinese drug companies, backed by the Chinese Academy of Sciences, devised a method to reduce the five-step process for making the vitamin to a two-step fermentation. This method cut the cost of production and gave China a manufacturing edge. China was not able to fully exploit this advantage, however, until 1997, when European and Japanese producers were accused of price-fixing by both the US and the European Commission. This allowed Chinese producers to enter the market. In doing so, however, these Chinese companies formed their own vitamin C cartel in the early 2000s, leading to price increases of up to 600%. When US businesses sued the Chinese companies for antitrust violations, the Chinese government asserted in federal court that Chinese law required its domestic companies to fix prices and control exports of vitamin C to the US.
Today, only one Western company – the Netherlands’ DSM – produces vitamin C, and it does so at only one factory – at Dalry, in Scotland.
Vitamins are essential for human health, and being dependent on a single country to produce the bulk of the world’s supply puts the world in a vulnerable position. Some countries have recommended that their citizens take additional supplements of Vitamin D during lockdowns connected to the COVID-19 pandemic. According to Sky News, the supplement is also being issued to British soldiers. As China controls the five powers’ supply of vitamins, it could charge their citizens and patients higher prices, or extort concessions from their governments to keep prices affordable.
The authors fear China. They call for decoupling using 'negative', 'positive' and 'co-operative' policies.
The Report is being used by "conservative" voices in each country to agitate for such a decoupling. Because in the politics of of 'national interest', security concerns weigh heavier than trade or commercial concerns, such a policy by our intelligence community could have wide economic implications. These are issues that need to be openly debated.
101 Comments
No to worry! I'm sure I've seen a picture recently of a prominent New Zealander shaking hands with a smiling Xi Jinping. Probably just chewing the fat about the property market in Parnell though. He'll see us right...(sarc/off in case there is doubt)
Whatever happened to the New Zealand that told the USA that "it couldn't berth its nuclear ships in our country" and we got told "Do it or else" but we stood firm.
Sure ANZUS became ANZ... for a long time. But we have had a backbone before. Now is the time to find it again.
How are we dependent? If they stoped selling aspirin etc to us wouldn’t we just buy it elsewhere? Surely the real dependencies are what they buy from us ( and the economic effects of them not buying from us).
And then to make the article more ridiculous they say we are dependent for our vitamin sources. Who cares. In fact this article suggests we are much less dependent than I imagine, worst case scenario we might not be able to cure our headaches or buy a new TV for a bit.
If China didn't exist what would we have done? We would have been just fine that's what!! It's time to kick this bully into touch. After all, a bully will only victimise somebody who allows it to. If we cut them off completely they will turn their bullying attentions onto someone else who they have a hold over. Don't let that be us anymore. If the greedy among us want to deal with China let them move over there. NZ is a sovereign country ..... lets keep it this way!
I am sure we will not be the only country cutting them off. A high number countries say China has become uncompetitive for various products also the trust has eroded due to the pricing escalation and product standards of pandemic products and their rants and threats to those countries who challenge them on the virus. If Trump stops importing products from China and they in turn take over Taiwan what will this mean globally.
Who said we are cutting them off? Jacinda can't even state that Taiwan is a sovereign nation under democratic rule. She is just as much afraid of China's bullying as she is of a bad hair day or, poor lighting for the next photo shoot. At least it is very clear now (generally published) after decades of deceit what China have been striving for. The vocalizing of threats and posture towards western nations is a relief IMO. If they had of just keep their mouths shut and simmered for a few more years they would have quite likely achieved their goals of world domination. In a way, we all need to give some recognition to nature for bringing out the worst in people for everyone to see in plain sight. I'm still waiting for proof that China did not functionally modify this virus and release it. Guilty until proven innocent.
Thank you Fritz. My thoughts entirely. On the one hand we have all this euro and americocentric pap. on the other we have a real dilemma about how to manage China (an obvious and frighteningly big trading partner) without sacrificing sovereignty. There's a few obvious building blocks to this, including don't sell your land or family silver (productive capacity), and maintain a positive neutrality on the world stage.
Look at the end of the day we have all been told not to worry about selling the family silver as we will all get great jobs working for the new foreign owners, so we should all be super grateful! Also it's really important to refer to selling our assets as "foreign investment", sounds much less scary than selling our best land and resources to wealthy foreigners. Sure NZ has been selling the goose that lays the golden eggs to the highest bidder (e.g. our farms), but don't worry we can all have "jobs" helping collect the golden eggs to pass on to our new global owners, yay! Also please don't pay attention to the fact the new owners are cheating by structuring their businesses across the best global tax havens and borrowing offshore at much cheaper rates than locals owners could ever achieve, that's irrelevant. Wealthy global corporations and individuals don't deserve to pay tax, that's the responsibility of those that work in "jobs", not something wealthy global asset owners should have to dirty themselves with. Look NZ Inc's shift the last couple of decades to be a global leader in free market thinking and an open economy has been awesome for us, that's why our rock star economy over recent years delivered such strong wage growth and 'we the workers' now enjoy all the fantastic benefits like affordable housing, low food and energy costs, world class health care and education, etc. Don't worry, this free market experiment definitely hasn't plummeted NZ down on OECD productivity and income ranking, 'Real wages' haven't dropped and there is no way this will all lead to a low wage economy where the profits are extracted offshore to larger, dominant players. Everything is awesome, happy Monday NZ!
P.S. The Aussie banking system already own our assets anyway via the mortgages they hold over most of our property and businesses and we can totally trust them to only extract a fair profit, there is still heaps of fat left over for local peasants (oops I mean workers and 'Mum & Dad' business owners).
Ah you see though richard, this is the kind of defeatist attitude the Chinese strategy aims to create in its victims. That is the whole plan. Penetrate to the point where everyone thinks they're in checkmate so they just roll over and give up. Pulling off the band aid will hurt but come off it must. The consequences of not doing so are becoming a vassal of the first communist state with such advanced surveillance technology that once it's in control it could never possibly be overthrown.
China has been successful in extending its foot print by throwing money and if it does not work use muscle power.
Agree that NZ cannot do without China. Try saying anything that may upset our masters and see how many biased vested politicans, experts and media will raise the alarm.
Greed overtakes national pride/independency.
Those stats on medicines are truly terrifying. What an absurdly dangerous situation we have put ourselves in. What more evidence do you need to see that decoupling is an urgent issue.
I would be very interested to see the inverse analysis: what does China depend on importing from the West? Not just NZ but NZ/Aus/US/Canada/Europe/Japan.
Ask yourself NZ. If You were deeply entrenched economically with Adolf Hitlers Germany in 1935 would you continue dealing with them indefinitely because it would hurt the economy if you didn't? The CCP has proven itself capable of atrocities and they are getting bolder. Who knows what they are capable of next. They are certainly threatening many countries now. Don't sell your souls for greed. Stop dealing with them NOW!
I don't care about the morality of my dentist or car repairer so long as they treat me straight then if they go home and kick the cat it is to be regretted but not to the extent that my toothache isn't cured and my car remains broken down. Our problem with China is the totally dumb and naive way we thought we could have 'a special relationship' with them. It didn't help the UK with the USA so what chance it would work when the sizes are even more unequal and the cultures far more alien. Letting them pay for our political parties is the single dumbest thing we have done but there are many more things we should be highly cautious of. Otherwise we buy from them if we want to and let them chose if they want to buy from us - but treat them as a fickle customer until proven otherwise.
I'm sure the Uighurs the Chinese are holding in camps and their wives getting raped by their new "husbands" might take a different view. China's only contribution to the last three decades has been a river of cheap labor. Now that has gone the country has negative value to the rest of the world.
Sorry but we are now tied in with them way too deep to pull out. At some point in the not so distant future, China is going to make a play to be number 1 in the world. The rest of the world cannot turn round and get bitter about that because the rest of the world made it happen. For decades the very few at the top have been getting rich from getting their products made in China and what now they are turning round and crying foul ? Sorry too late. Better to now be forging at least a neutral relationship with China and not do what the idiots in Australia are doing right now.
Spot on. They overestimate their importance and their ego has gotten a little bit ahead of itself. They are threatening to cut trade with individual countries if they don't like that countries stance on a CCP policy. They need to realise that if all these free world countries, collectively, decide to no longer trade with China, they will return to nothing more than a farming backwater with empty high rise blocks. China is like a big Dubai. Won't be long before its desert again, unless they come to terms with how important they really are and start playing nice.
Now I am worried about you Fritz. China's resilience comes from the fact that its domestic economy is just starting to gear up. The speed (and quality) and cost of transferring from export to domestic-focused production is what we should be watching and measuring. China's debt/GDP balance is low by any standard (except perhaps NZ's?) so they have plenty of wriggle room.
For me the key for NZ is to get back to self sufficiency in the key defensive industries (and health and wellbeing is front and centre here), and trade with whatever partner wants our goods.
Good point. "Just starting to gear up". Which makes it even more critical they have effective supply of raw materials necessary to support a sustainable domestic economy. We (NZ) are in a good position to balance our interests with foreign interests as long as we don't keep selling our land and key infrastructure to the highest bidder.
I'm very scared of China but this report doesn't worry me. If China stops Vitamin C sales I can eat oranges; stop asprin and I'll take a different pain killer. Production of these items may be cheaper in China but it would not be difficult to manufacture anywhere and a price increase by tenfold still leaves asprin cheap.
Didn't the wise man say, never put all your eggs in one basket.
This goes for many things in NZ. An economy built on Tourism, Housing, and Milk. Makes us incredibly vulnerable IMO. Luckily for tourism, we do have a domestic market that can partly fill the void. I remember the days when it was mostly domestic tourism, when holidaying in NZ was normal, rather than going overseas all the time. Cuts down on our carbon footprint too. IMO NZ was a better place back in the 80's an 90's.
YES .................... we HAVE TO start diversifying from China without delay , I have been saying this on this forum for ages now .
China is a massively risk place right now , now matter how you look at it .
We need to spread our eggs over more baskets , new markets and less reliance on a bully , possibly rogue nation we simply cannot trust.
The next financial crisis will come from China , and the early stages of it re evident already, massive debt , possible defaults , markets drying up leading to unemployment , which leads to social discord .
In addition , the US Federal Pension Fund is going to dis-invest from China in the coming weeks , and while this single event is not likely to cause a market rout , if other Western Fund managers follow-suit , its likely to do so
Everyone is talking about reset, now knows what the word reset meant = that world should reset their relation and dealing with China.
Today China is one of the most.....country.
WP if plays his card properly can come out winner this time as people have ANTI feeling world over of only one country and that is.....
I've previously held high government security clearances and operated in areas that generally can't be talked about, with access to material higher than almost all of our policy makers (with the exception of just a handful).
It always blew me away that we are/were extremely two faced in our approach to the world - trade with China, but no information sharing - yet if a global conflict were to arise, we'd have ourselves in a bit of a pickle if we needed to pick a side. Would we decimate our diary farm industry and other exports to China to maintain stability with our past allies who appear to be in a state of decay?
Exactly. Superpowers change and people have been predicting the shift from USA to China dominating the international stage for the last 15 years at least.
Change is the only constant. The CCP is clear and focussed on its primary goal, and that is expansion and control. We have historically been in a relatively good position where China have expressed some respect and appreciation for our willingness to hold back and not pick a side. They "like" us. Why screw that up.
I also agree with a previous comment that somewhere some adults need to have a conversation. We shouldn't be fighting fights that are not ours to fight. Any country that is forcing us to come out and voice support for their policies so we can stay in the clique should be viewed with just as much suspicion as one that threatens backlash if we do so. In so far as is possible we mind our own business. We can talk about moral ground and values, but hell they have real big guns guys. As with anyone who wasn't born yesterday, don't wear your heart on your sleeve, just pick your moments to protect the things that are important to you as carefully and efficiently as you can.
I remember my late Grandma back in about 2000 saying that China will take over the world, and she was somewhat right. That was 20 years ago, and the world has changed so much. I don't think she would like what has happened in these last 20 years to NZ. NZ IMO does need to decouple, but I think many countries are going to do this, and it could be a step away from Globalisation, which I don't think is a bad thing. Cheap imported rubbish that is designed to throwaway after a period of timel, that we import, and that just ends up in landfills in less than 10 years, is not sustainable for the planet long term.
"We shouldn't be fighting fights that are not ours to fight"
What nonsense. This is a fight that will affect everyone. We just refuse to learn from even very recent history. Perhaps look up 'First they came', the last line in particular:
"Then they came for me
And there was no one left
To speak out for me"
If world war 3 commenced, I would say that the average citizen like you or I is going to be horrified at how badly we underestimated China's capacity to cause destruction. Where do you think our allies will be if they are overrun? They will be looking after their own. In that scenario what do we have? Our military. Have you seen our military? If we can't stand alone and defend our own, we need to have a foreign policy that reflects that reality.
If we sit on the sidelines, refusing to take a stand, any foreign policy we have won't matter. I don't pretend that this is entirely black and white, that the five eyes are always the good guys. But there is still some attempt at democracy amongst certain nations that is worth holding onto. China would crush even the semblance of that, were it sure of success. We should be actively decoupling and willing to take a stand, to represent a united front in opposition to this. China doesn't 'like' us. They like our acquiescence to being subjugated. If, or really when, this comes to a head, we have nothing to gain from not supporting as we are able, the effort to resist China. We have everything to lose in that fight. Unless you consider total subjugation under Chinese rule to be a win for us. To think we can sit this out and somehow benefit from our neutrality, is ridiculous.
Who cares? What is done is done. Just get on with it, a stone throwing exercise achieves what? (Except possibly world war three). If the US are trying to pretend they are on some moral high ground and have never promoted certain situations for military or economic gain then who's buying that load of tripe? Hopefully not many people here.
So if someone beats you half to death in a bar your response would be to not check the security camera footage and let it go? China encouraged their citizens to flood the West when they had locked down domestic travel. They bought all the worlds PPE while lying that the virus could be transmitted between humans.
No one will let this go.
A communist dictatorship that manipulates its currency, oversees forced organ donation, facilitates rampant intellectual property theft, allows dogs/bats/pangolins to be boiled alive, and exports shoddy goods that break after 5 minutes.
Sounds like a great partner to build the foundation of our long-term future with.
Some very interesting perspectives here. Some people still even think that China is still a 3rd world country. Well some of it maybe but their cities and infrastructure makes Auckland look 3rd world. Perhaps more people should watch Aljazera their manufacturing is mindblowing and makes us look insignificant.
Yes Auckland does not look significant compared to big Chinese cities or most European capitals or even most American state capitals. And that is the way I like it. If Auckland could just shrink a little it would be great place.
Here is a helpful perspective - NZ is growing rapidly and will soon have its 5 millionth inhabitant. The Chinese census employs 7 million census takers.
Exactly Carlos. I was living in Beijing in 2002-2003 (during the SARs epidemic coincidentally!) And the stuff they were doing back then was mind blowing. You should see the labs and kits they have at some of their top universities, and that was the stuff I saw, there was a whole world behind locked doors that foreigners weren't allowed anywhere near. They are not messing around and unlike America they dont spend half the time blowing the trumpet about how "awesome" they are. In fact they do the opposite. So safer to assume you have absolutely no clue as to what they currently have up their sleeve. But I suspect it's not a pocket sling shot.
Use the word Fentanyl instead..
https://www.google.co.nz/amp/s/www.nytimes.com/2019/10/16/magazine/chin…
The bully in the playground calling the other guy a bully because everyone likes his stuff, sounds like a complete bigot to me.
"Yeah, let's trade only with those that send bombs, armies etc to Yemen, Iraq, Libya etc etc. Even better, let's side with the real bullies, those that can, and do, go to war with whomever they choose, whenever they choose".
We are a free people afterall, and that should translate to being free as individuals to choose. So why dont all those who are petrified of China simply stop buying the stuff that the 5 eyes put on a list, and you can rest assured that you're doing your best to be loyal to the puppet masters we've all been enslaved to for 70 years. The rest of us can carry on making choices in our weekly shopping as we always do, choosing what we buy because of price, quality or whatever gauge we use to choose our produce.
If not, we'll find ourselves buying only what the 5 eyes and their brown shirt supporters bullied us into having.
I love the way some people actually believe NZ and it's 5 eyes mates are the "world". There are close to 200 nations on this planet, over 7 billion people, and the western nations make up a surprisingly small % of all that. And the irony is, that they also use more resources collectively, and are among the most indebted. Not necessarily the best clients to have buying your stuff if you plan on being paid.
Something to mull over on a sunday perhaps?
Naïve liberalism got us into a situation where China has such a powerful economic hold over NZ. We chose to sell them the kitchen sink, and they bought what was on offer. But the solution is not aligning ourselves with a rabid anti-China stance at the expense of what good economic relationship we could have with China IF WE CAN BE MORE STRATEGIC in our dealings with them. There is zero sense in provoking China unless you're a glutton for punishment. Now, if you really want to go after trade partners with human rights issues, let's talk about our oil imports from the Middle East. Or, if you want to talk about trade partners who are shifty - let's talk about Japan and the US signing their own FTA after selling the TPPA or CTPPA to naïve nations promising access to new markets. Remember that one?
Take it easy, Rosenstein.
Foreign Buyer along with many anti-China commentators are known CIA agents.
Same as their master Pempeo, their job is to lie, to cheat, and to steal...
https://www.msn.com/en-us/health/medical/mike-pompeo-says-we-lied-we-ch…
Well Rosenstein, at least you are free to say what you want to say and raise your voice saying it. Maybe were all naive, but we can still speak freely, hold religious freedom, ask questions of our elected officials and associate with who we like whenever we want to. It’s the way the CPP Acts when questions are asked that they believe should never be asked. The CIA aren’t knocking on your door for speaking about WMD are they?
The Charity Commission is considering whether it needs to take regulatory action against the right-wing think tank the Henry Jackson Society, after the Japanese embassy reportedly paid the charity to promote anti-China propaganda.
The commission said it had contacted the HJS in connection with an article in The Sunday Times at the end of January that said the think tank had received about £10,000 in a deal with the Japanese embassy to wage a propaganda campaign against China. Link
Is there no end to Britain's propaganda efforts? - https://www.moonofalabama.org/2020/05/how-can-trump-still-win-the-elect…
Why on earth would we want to decouple away from our main trade partner with whom we have a handsome surplus towards traditional blocs with whom we have deficit, have trade barriers on their part, and who make the same stuff.
Control foreign ownership, yes. Decouple, no. Buy some aspirin from India.
China hasn't open up as much as we wished. Don't have a tanty about it.
Stupid article. Let’s just eat more oranges, spend 20 minutes outside each day, eat more leafy veg, eggs, fish and red meat. Vitamin problems solved. Vitamins by and large are simple compounds and could easily be made domestically if the need arose. And the jury’s out on whether we need supplements anyway. I do think there is a conundrum, though in the fact that economically we are drawn to China, while culturally we have proximity to the West.
This "conservative" think tank can go and stick their opinion where the sun don't shine. As Penfold states above we have a handsome surplus from our trade with China.
The worry about vitamins is just risible.
Maybe the UK and US should stop fomenting rebellion in Hong Kong and Western China. We should just ignore these loonies.
For the people who think we don't need to take any stand, except when necessary to protect our own interests - there are various versions of 'First they came' to choose from, but the message is the same:
First they came for the socialists, and I did not speak out—
Because I was not a socialist.
Then they came for the trade unionists, and I did not speak out—
Because I was not a trade unionist.
Then they came for the Jews, and I did not speak out—
Because I was not a Jew.
Then they came for me—and there was no one left to speak for me.
Reading the article & posts reminds me of the Toyota ''Buggar'' add of many years ago. I think this is one of those moments.
We should have been having these serious China conversations 20 years ago people. It is probably too late now. The only thing that will stop China now is the rest of the world telling them to f...k off, & as much as I'd like for that to happen, I just can't see that happening. I really hope the rest of the world tells them to FO but sadly, we in the west seem to be running out of friends right at the moment. Something about a trumpet, or something like that anyhow.
China reminds me of Nazi Germany on steroids. It has its own concentration camps and a surveillance system that would put the Gestapo to shame and imperial ambitions to boot. I have been to Xin Jiang and it was a place I was grateful to leave. In one day I went through ten police checks.
Lets disengage and up our military spend.
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